THE M&S TRANSPARENCY STUDY: Research Report
Prepared by GlobeScan
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May 2015 Agenda
1. Context 2. Overview 3. The State of Transparency 4. Transparency at M&S: Metrics and Issues Prioritisation 5. Transparency at M&S: Communications and Engagement 6. Conclusion 7. Appendix
NOTE: In this report, all figures are percentages unless otherwise noted. CONTEXT Global Companies Face a Trust Deficit; Transparency is a Key Driver of Trust
GlobeScan Radar 2014: General public study in 24 countries . Face-to-face and telephone interviewing (online in Israel) Unilever Is Viewed As The Number One Leader in Transparency; M&S Comes Fifth
Transparency Leaders, Unprompted (Total Mentions), Total Sample, 2014 and 2010
18 2014 Unilever 4 2 2010 BP 2 6 Patagonia 3 2 HP 1 5 Novo Nordisk 3 1 Shell 5 Nike 5 3 GE 1 4 4 M&S 3 1 Timberland 2 Nestle 4 1 Ford 1 3 2 Interface 5 1 BT 2 Puma 3 The co-operative 1 Rio Tinto 3 2 1 IBM 1 Coca Cola 3 2 1 Vodafone 1 3 3 BASF 2 Walmart 1 Statoil 3 3 2 Natura 2 Starbucks 1 2
GlobeScan GSS 2014: Sustainability experts study conducted in partnership with SustainAbility. Online format. Q.2. Which individual companies do you consider leaders in transparency? Please enter a maximum of 3 companies in the spaces provided.
Unilever Has a Strong Leadership Position in All Regions; M&S Is Particularly Strong in Europe
Latin America / Asia Africa / Middle East Europe North America Oceania Caribbean Unilever Unilever Unilever Unilever Unilever Natura 17% 27% 19% 18% 16% 16% Nestle Woolworths Novo Nordisk Patagonia Interface Unilever 6% 7% 7% 13% 8% 13% P&G Nestle M&S Nike Novo Nordisk Statoil 6% 7% 7% 10% 8% 7% SAB Nestle Interface Westpac Rio Tinto 7% 4% 6% 8% 7%
BASF Coca Cola GE Shell Interface BASF M&S M&S HP Nokia Patagonia J&J Novo Nordisk Rio Tinto BASF Novo Nordisk Nestle HSBC P&G BHP BMW Shell 4% 6% 7% 4% Anglo American Whole Foods GSK BT IBM Triodos Bank Ikea Virgin 4% Walmart 3%
GlobeScan GSS 2014: Sustainability experts study conducted in partnership with SustainAbility. Online format. Q.2. Which individual companies do you consider leaders in transparency? Please enter a maximum of 3 companies in the spaces provided.
OVERVIEW Our Starting Point Our Approach: Stakeholder Intelligence and Engagement
Engagement Intelligence
4. Reporting, workshop, and Thought Recognised 1. Review of Leadership thought leadership Leadership existing research
3. Qualitative in-depth 2. Quantitative telephone interviews online survey (n=14) (n=172) Why Stakeholder Research Matters
Stakeholders are:
• Key players in transfer of information and #1 INFLUENCERS OF NATIONAL & creation of associations with brand INTERNATIONAL CONVERSATION • Opinion often carries extra weight
• Control opportunities to access and engage #2 GATEKEEPERS the public & POTENTIAL ALLIES • Define context for doing business • Can amplify initiatives & actions
• Predictive of consumer perspectives two to #3 five years later THOUGHT LEADERS • Provide insights into future context and how
to future proof business model Why Stakeholder Research Matters
Stakeholder views result from a range of consumer and professional experiences and associations: Stakeholder Mindset
CONSUMER + PROFESSIONAL
Brand Interaction Individual Values PRODUCT BELIEFS SERVICE KNOWLEDGE COMMUNICATIONS PRIORITIES PROFESSIONAL CONTACTS
Influencers FAMILY & FRIENDS OTHER STAKEHOLDERS PUBLIC
EMOTIONAL + RATIONAL Questions Areas and Flow
Testing of Source of influence Transparency – its stakeholder and M&S benefits and risks engagement communications approaches channels
State of Transparency transparency today performance vs Full overview of at large established issues importance stakeholder companies expectations, best practices, performance gap(s), and opportunities to Key trust and enhance transparency metrics communications and Best practices for M&S and engagement comparators Respondents Profile: Quantitative Online Survey (n=172)
M&S Transparency Survey Demographics, Total Sample, 2015 (Online fieldwork took place between 12th January and 2nd February 2015)
1 Academia 1 NGO/think tank 6 16 8 3 Media UK 20 North America Consultancy 19 48 Latin America Corporate Europe (excl.UK) 25 Financial institution / 6 Asia SRI fund Other 29 Government 16 2 Other
Q0x1. Before we start the survey, we would like you to please confirm which sector best represents you and your organisation Please select from the list provided below. Q0x2. Please select your country of residence from the following list. Respondents Profile: Qualitative Telephone Interviews (n=14)
(Interviews fieldwork took place between 12th January and 13th February 2015) • Dan Crossley, Executive Director, Food Ethics Council • Prof. Dale Southerton, Director, Sustainable Consumption Institute, University of Manchester • John Elkington, Founding Partner and Executive Chairman, Volans • Prof. David Grayson CBE, Director: the Doughty Centre for Corporate Responsibility, Cranfield School of Management • Karin Kreider, Executive Director, ISEAL Alliance • Bob Langert, former VP, Corporate Social Responsibility, McDonald's Corporation • Katie McCoy, Head, Forests Program, CDP • Dara O’Rourke, Co-founder of GoodGuide, Associate Professor, University of California, Berkeley • Lena Staafgard, Programme Director, Better Cotton Initiative • Peter Van Veen, Director, Business Integrity Programme, Transparency International UK • Tensie Whelan, President, Rainforest Alliance • Andrew Winston, CEO, Winston Eco-Strategies; author of The Big Pivot and Green to Gold THE STATE OF TRANSPARENCY According to Stakeholders, How Companies Share Information Matters as Much as What They Share
Stakeholders define “transparency” as:
• Communicating on • Data for the whole WHAT progress, successes, value chain failures • Issues of relevance to
stakeholders HOW Providing Being open material and honest information
Ensuring easy Engaging in access two-way
dialogue
HOW
HOW • Easy access • Consultative mind-set • Multi-formats • Answering questions
Online survey and telephone interviews: Q1x2. In your opinion, what does it mean for a company to be transparent? Stakeholders Want Contextual Information Around Data and Targets
Purpose Vision
Decision Making NARRATIVE and Governance AND CONTEXT AROUND Strategy and Plans DATA
Deep Dives into Issues (risks and opportunities)
Data and Targets “All the company does can be published in a “Show where things are made, with what, by newspaper.” whom. Make it easy to ask questions and (Online survey respondent) make an effort to answer them.” (Online survey respondent)
“All is concocted through targets that the company aims to achieve – most of the time these targets are arbitrary and non-achievable. Targets are very restrictive – focus on very specific problems but these problems shift over time and this is not taken into account. The focus is to narrow on the targets – companies should look at the bigger picture in order to not be limited.” “I don’t want to see companies in gold fish bowls; I want to see interesting conversations (Telephone interview respondent) with companies.” (Telephone interview respondent)
Online survey and telephone interviews: Q1x2. In your opinion, what does it mean for a company to be transparent? Trust is Viewed as the Number One Benefit of Transparency
Benefits of Transparency for Companies, Unprompted, Total Sample, 2015
29
12 11 10 7
Builds trust Creates a better Enhances reputation / Facilitates stakeholder Enhances stakeholder understanding / brand loyalty dialogue, innovation, engagement and management of and problem solving relationships performance, risks, and opportunities
Online survey: Q1x3. In your view, what are the main benefits of transparency for companies? Vulnerability is Viewed as the Main Risk of Transparency; Loss of Competitive Advantage Comes Second
Risks of Transparency for Companies, Unprompted, Total Sample, 2015
33 24
9 6 6
Vulnerability / exposure Loss of competitive Loss of business or Overdisclosure (too Misunderstanding and to criticism advantage reputational value much information misuse of information shared)
Online survey: Q1x5. In your view, what are the main risks of transparency for companies? Overall, Benefits of Transparency Outweigh Risks
“Risks are perceptions. Some may feel threatened by exposure. For me the main risk of transparency is the lack of it.” Close to 1/3 (Online survey respondent) more benefits
mentioned by “The age of control is over. In the long term stakeholders than risks there are more risks for not being open.” (Telephone interview respondent)
Online survey: Q1x3. In your view, what are the main benefits of transparency for companies? Q1x5. In your view, what are the main risks of transparency for companies? More Than Half Believe Companies are Not Transparent Today; Little Improvement Made Over the Past Five Years
Transparency Performance of Large Established Companies Today and Evolution in Past Five Years, Total Sample, 2015
Over the past five years: 16 : Only 19% say companies’ Transparent performance has improved Neutral 54 : 77% say companies’ Not transparent 31 performance has stayed the same
: 2% say companies’ performance has declined
Online survey: Q1x6. How would you rate the state of transparency of large established companies these days? Q1x8. Have companies in general become better or worse at providing information to relevant stakeholders in the past five years?
Transparent = those rating (5+6+7) on 7-point scale; Neutral = those rating (4); Not transparent = those rating (1+2+3) Selective Disclosure, Insufficient Focus on Supply Chains and Company Mind-set Are Seen To Be Standing in the Way of Transparency
Reasons Given for Not Being Transparent, Spontaneous Mentions, Respondents Who Score (1-3), 2015
Limited / selective disclosure #1 across all areas of business risks “Very little honest information around the full picture of supply chain practices. Too much reliance on good news stories and positive spin.” (Online survey respondent) #2 Insufficient focus on supply chains
“Most companies still believe in trade secrets and the "secret" sauce.” #3 Old mind-set at companies (Online survey respondent) still prevails
Online survey: Q1x7. Why did you select [INSERT SCORE] in previous question? Please explain. Unilever Regarded as the Number One Leader in Transparency; Marks & Spencer Comes Second
Companies with Best Transparency Performance, Unprompted, Total Sample, 2015
17%
5% 4%
11%*
* Caution: respondents were made aware that the survey was commissioned by M&S
Online survey: Q1x10. Can you name one or more companies that you think are doing a good job being transparent? That is, in providing information or making information available to relevant stakeholders? Please name up to three companies. Please feel free to name a company other than M&S. Transparency Leaders
Reasons Given for Best Transparency Performance, Spontaneous Mentions, 2015
UNILEVER • Strong CEO commitment and engagement • Openness about goals, progress and failures “As a company they are accessible in my • Regular detailed assessment of performance view, their CEO speaks often on the subject of sustainability generally and what they as • Proactive communications a company face in terms of challenges.” • Direct engagement with stakeholders (Online survey respondent) • Accessible and easy to understand • Leadership example for others to follow
Online survey: Q1x10. Can you name one or more companies that you think are doing a good job being transparent? That is, in providing information or making information available to relevant stakeholders? Please name up to three companies. Please feel free to name a company other than M&S. Transparency Leaders
Reasons Given for Best Transparency Performance, Spontaneous Mentions, 2015
M&S • Plan A: proactive and regular communication on goals, actions, policies, and strategies “Because I work with the Plan A team and • Regular monitoring and progress updates see how much work happens in this area.” • Active stakeholder engagement through (Online survey respondent) various channels – incl. with the Plan A team • Easy access to information
Online survey: Q1x10. Can you name one or more companies that you think are doing a good job being transparent? That is, in providing information or making information available to relevant stakeholders? Please name up to three companies. Please feel free to name a company other than M&S. Transparency Leaders
Reasons Given for Best Transparency Performance, Spontaneous Mentions, 2015
NIKE and PATAGONIA
• In-depth information about suppliers (factories, etc.) • Openness about challenges and failures as well as about means to tackle them
Online survey: Q1x10. Can you name one or more companies that you think are doing a good job being transparent? That is, in providing information or making information available to relevant stakeholders? Please name up to three companies. Please feel free to name a company other than M&S. Emerging Trends: The Age of Technology-Fuelled Hyper Transparency
“There is an explosion of online data sources (with info on sustainability of products) and increasing drivers to make information available online.” (Telephone interview respondent)
“There is no turning back, we are moving towards radical transparency. In five years we should assume the next level of hyper transparency – but it could be 2–3 years.” (Telephone interview respondent)
Telephone interviews: How is corporate transparency going to evolve 5-10 years from now? Online survey: Q1x2. In your opinion, what does it mean for a company to be transparent? Emerging Trends: Supply Chain Issues and Reciprocal Transparency with Suppliers
Two-way dialogue and collaboration to build trust, solve issues (beyond 1st tier)
Making sure buyers are as transparent with suppliers as they expect suppliers to be transparent with them BUYER SUPPLIER
Telephone interviews: How is corporate transparency going to evolve 5-10 years from now? Online survey: Q1x2. In your opinion, what does it mean for a company to be transparent? Emerging Trends: Being Transparent with Consumers, But How to Change Behaviour?
Value creation Consumers’ decision-making Changing HOW? behaviour Choice editing at the source
Educating consumers through transparency
Satisfaction of transparency Risk mitigation
Telephone interviews: How is corporate transparency going to evolve 5-10 years from now? Online survey: Q1x2. In your opinion, what does it mean for a company to be transparent? The State of Transparency: Key Points
• Transparency is about going beyond data
• Despite the leadership of a few, in general companies are not perceived to be transparent
• Future trends point to the role of supplier and consumer engagement TRANSPARENCY AT M&S: METRICS AND ISSUES PRIORITISATION Trust in M&S is Largely Stable But Two in Ten Stakeholders Report Improvement Over the Last Couple of Years
M&S Trajectory of Trust, Total Sample, 2015
NET POSITIVE +19
Weaker Stayed Stronger The Same 1% 77% 20%
Online survey: Q1x14. How has your trust in M&S changed over the last couple of years? Please use a scale from 1 to 7, where 1 means it has become “much weaker” and 7 means it has become “much stronger.”
Stronger = those rating (5+6+7) on 7-point scale; Stayed the same = those rating (4); Weaker = those rating (1+2+3) Stronger Performance on Supply Chain Issues; Expectations Set to Increase at Both Ends of the Value Chain
M&S Value Chain Transparency, Performance (Top 2 Boxes) vs Importance in Next Five Years (Total Mentions), 2015
% saying expectations to increase in next 5 years Origin (how products are sourced) 30 67
Manufacturing (how products are made) 20 37
Distribution and marketing (how products 13 3 are sold to customers)
Consumption impact (what impact is 31
VALUE CHAIN VALUE 12 generated by consumer use)
End-of-life use (how products are re- 16 39 used/recycled)
Online survey: Q2x3. Please rate how M&S performs when it comes to sharing information with its stakeholders about the following stages of its value chain. Q2x4. For which of these stages of the M&S value chain do you think expectations for transparency will increase, or increase the most, over the next five years? All ratings based on 7-point scales Key Strengths to Build On (Plan A) and Opportunity to Focus On Supply Chain Issues (Workers’ Rights)
GENERAL ISSUES FOOD CLOTHING HOME / BEAUTY
AREAS WHERE • Vision / values (Plan A) • Systemic issues (food TRANSPARENCY • Child labour • Ingredients CAN BE • Stores’ impact safety, sustainable • Supplier standards • Animal testing LEVERAGED • Policies and standards food, climate change) (STRENGHTS)
• Supply chain (workers’ rights, suppliers AREAS WHERE • Distribution operations’ TRANSPARENCY standards) • Workers’ rights • Workers’ rights impact on environment NEEDS TO BE • Water • Toxicity / chemicals • Supplier standards • Employee treatment IMPROVED • Fair pricing • Local sourcing
• Environmental pollution • Paying taxes • Environmental pollution OTHER AREAS TO • GMOs • Fair pricing MONITOR • Lobbying • Water • Water
>> See Appendix for more information: slides 48 to 53
Online survey: See all question wording in Appendix. Example: Q2x5. Now, please rank how important it is for M&S to share information with its stakeholders on the following range of issues relevant to M&S. Q2x6 Please consider the top 5 most important issues you have just selected and rate how M&S performs when it comes to sharing information with its stakeholders on these specific issues. Transparency at M&S: Key Points
• Strong foundations to build on: o Good trust and advocacy metrics o Plan A vision and platform
• Supply chain issues top stakeholders’ concerns (workers’ rights, etc.)
• Expectations towards end-of-life use and consumption impact are set to increase
TRANSPARENCY AT M&S: COMMUNICATIONS AND ENGAGEMENT M&S-Owned Communications Channels Top Stakeholders’ Preferred Sources of Information
M&S Sources of Information (Total Mentions), Total Sample, 2015
M&S website 53 M&S Plan A report 52 Information inside M&S stores 41 M&S Annual report, or strategic report 35 Social media (Facebook, Twitter, Instagram, etc.) 35 Annual Plan A stakeholder event 32 M&S Plan A team members speaking at events, etc. 30 News reports 28 Information from NGOs 26 Ratings and rankings 18 Top 5 current sources: Colleagues / professional network 18 • M&S Plan A Report (58%) Staff in M&S stores 17 • M&S Website (55%) • News reports (51%) M&S brochures and other promotion materials 15 • Colleagues / prof. network (44%) Trade press reports 11 • M&S Plan A team (40%) Friends and family 7
Online survey: Q3x3. Through which of the following channels would you prefer receiving information on M&S in the future? (chart) Q3x2. How are you informed on M&S currently? (side box) The M&S Plan A Report Is An Effective Channel Among Those Engaged and Actively Engaged; Website And Event Also Important
M&S Sources of Information (Total Mentions), by Stakeholder Category, 2015
Stakeholders Not Pro-Actively Engaged Stakeholders Engaged by M&S Stakeholders Actively Engaged by M&S by M&S
Not directly part of the M&S network Receive M&S Plan A communication M&S Plan A Board members or key partners (Base=77) collaterals once to twice a year or get (NGOs, etc.) (Base=31) invited to annual Plan A event (Base=26*)
M&S website (52%) M&S Plan A report (62%) M&S Plan A report (68%)
M&S Plan A report (51%) M&S website (58%) Annual Plan A stakeholder event (58%)
Information inside M&S stores (38%) Annual Plan A stakeholder event (46%) Information inside M&S stores (58%)
M&S annual report, or strategic report Information inside M&S stores (42%) M&S website (55%) (36%) Social media (34%) M&S annual report, or strategic report Social media (48%) (38%)
*Caution: very small sample size
Online survey: Q3x3. Through which of the following channels would you prefer receiving information on M&S in the future? (chart) Q3x2. How are you informed on M&S currently? (side box) Opportunity to Enhance Communications Practices to Drive Trust and Transparency
M&S Communications and Engagement, Performance (Top 2 boxes), Total Sample, 2015
Making information accessible 26
Focusing on the most material topics 24 Effective communications Making information available to consumers 22 practices to be Having information from third party 21 leveraged
Providing independently verified information 20
Using latest technology 16
Proactively sharing information 16
Customising communications 13 Communications Sharing information to respond to specific concerns 13 practices to be enhanced Providing consistent/comparable data 9
Sharing information in real time 6
Online survey: Q3x1. In your view, how well does M&S communicate with its stakeholders in the following ways? NGOs / Think Tanks and the Media are the Primary Sources of Influence, Followed by Academics
M&S Stakeholder Influence Map – Main Influence Flows, Total Sample, 2015
Online survey: Q3x4. Which individuals and organisations influence your opinions and those of your colleagues about companies like M&S? Transparency Is Not Viewed In Isolation – Stakeholders Ultimately See It Core to Problem Solving And They Want To Be Involved
Stakeholder dialogue and “Move from one way information 'push' to more real time dialogue.” #1 engagement to solve issues (Online survey respondent)
“Try to push even harder in getting others to follow the example (…). Companies deliver a small #2 Addressing supply chain amount individually – there is a need for coalitions of issues head on companies to provide change in favour of more business practices.” (Telephone interview respondent)
Online survey: 4x1 Please share with us any suggestions you may have about how M&S can be even more transparent in the coming years. Telephone interviews: If you had one piece of advice to share with M&S on how to improve its transparency, what would it be? M&S Communications and Engagement: Key Points
• Strong position with M&S-owned channels being the most preferred sources of information
• Opportunity to enhance communications effectiveness to drive trust and transparency
• Stakeholder dialogue and collaboration is critical CONCLUSION Key Takeaways from the Study
• Transparency goes beyond data
• M&S is well positioned, among transparency leaders
• Supply chain and consumer-related issues top stakeholder expectations (consumption impact and end-of-life use)
• Transparency is not viewed in isolation: dialogue and collaboration is critical to stakeholders APPENDIX Transparency at M&S: General Issues
M&S General Transparency, Drivers Analysis – Performance vs Importance in Improving Trust, Total Sample, 2015
Online survey: Q2x1 Starting with general issues, please rate how M&S performs when it comes to sharing information with its stakeholders about the following areas. Transparency at M&S: Food Retail Category
M&S Transparency Issues, Food, Perceived Performance vs Stated Importance, Sub Sample, 2015
Online survey: Q2x5. Now, please rank how important it is for M&S to share information with its stakeholders on the following range of issues relevant to M&S' FOOD retail category. Q2x6. Please consider the top 5 most important food-related issues you have just selected and rate how M&S performs when it comes to sharing information with its stakeholders on these specific issues. Transparency at M&S: Clothing Retail Category
M&S Transparency Issues, Clothing, Perceived Performance vs Stated Importance, Sub Sample, 2015
Online survey: Q2x7. Now, please rank how important it is for M&S to share information with its stakeholders on the following range of issues relevant to M&S' CLOTHING retail category. Q2x8 Please consider the top 5 most important clothing-related issues you have just selected and rate how M&S performs when it comes to sharing information with its stakeholders on these specific issues. Transparency at M&S: Home/Beauty Retail Category
M&S Transparency Issues, Home/Beauty, Perceived Performance vs Stated Importance, Sub Sample, 2015
Online survey: Q2x9. Now, please rank how important it is for M&S to share information with its stakeholders on the following range of issues relevant to M&S HOME/BEAUTY retail category. Q2x10 Please consider the top 5 most important home/beauty-related issues you have just selected and rate how M&S performs when it comes to sharing information with its stakeholders on these specific issues. M&S Communications and Engagement (To Build Trust)
M&S Comms/Engagement, Drivers Analysis – Performance vs Importance in Improving Trust, Total Sample, 2015
Online survey: Q3x1. In your view, how well does M&S communicate with its stakeholders in the following ways? M&S Communications and Engagement (To Enhance Transparency)
M&S Comms/Engagement, Drivers Analysis – Performance vs Importance in Improving Transparency, Total Sample, 2015
Online survey: Q3x1. In your view, how well does M&S communicate with its stakeholders in the following ways?